An Indian high court has ruled in favour of Bahraini incumbent Batelco in its battle to secure payment under a settlement agreement concerning its former joint venture in the country, S Tel, which lost its licence in 2012 in the wake of the 2G licence scam.
An Indian high court has ruled in favour of Bahraini incumbent Batelco (BSE:BATELCO) in its battle to secure payment under a settlement agreement concerning its former joint venture in the country, S Tel, which lost its licence in 2012 in the wake of the 2G licence scam.
The court has granted freezing orders against Rs5bn (US$74m) worth of assets held by its former local partner Siva and related parties.
Batelco said in a statement that the orders made by the Madras High Court are intended to pay down a US$212m award following a ruling from the English High Court of Justice in June 2014.
The UK court had found that Siva chairman Chinnakannan Sivasankaran, known as Mr Siva, and co-defendants had failed to honour a settlement agreement signed with Batelco subsidiary BMIC in November 2011 concerning the mobile JV they had entered into in 2009. The court determined that the defendants should have made full payment to BMIC by 26 June 2014.
Commenting on the Madras court decision, Batelco group CEO Ihab Hannawi said: “We fully expect all of the respondents to honour the Indian court orders and pay to BMIC the monies owing to it under the UK judgement.”
He added that the company would pursue all available legal means to secure the payment.
BMIC acquired a 42.7% stake in Indian-registered S Tel in 2009, the year after the target had secured a 2G licence in the now-infamous 2008 spectrum auction. After India’s Supreme Court ordered a mass cancellation of 2G licences in 2012, BMIC sought to exercise a put option which, in circumstances such as the cancellation of the 2G licence or Siva’s failure to secure financing, would ensure Siva bought back the stake at the price BMIC paid. Siva agreed to buy Batelco’s stake in the JV and the Bahraini operator filed a lawsuit against it in November 2012 after payment was not made.